Delta Air Lines, the second-largest US airline by revenue, yesterday agreed to buy Singapore Airlines' 49 per cent stake in Virgin Atlantic, for $360 million (£224million) and agreed to establish a transatlantic joint venture with the Sir Richard Branson controlled carrier.

Virgin Group and Branson will continue to hold a majority 51 per cent stake in Virgin Atlantic, which will retain its brand and operating certificate, while Delta will get three seats on Virgin Atlantic's board.

Singapore Airlines had acquired the stake in 1999 for £600 million ($967 million), but the deal did not involve integration of operations.

''Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe," said Delta chief executive, Richard Anderson, in a statement.

Founded in 1984 by Branson and based at Gatwick, Heathrow and Manchester airports, Virgin Atlantic is Britain's second-largest airline serving the world's major cities.

Under the transatlantic JV, Atlanta, Georgia-based Delta will get more slots at London Heathrow airport, Europe's busiest gateway. The two carriers will operate 31 peak-day round-trip flights between Britain and North America, 23 of which will operate out of London-Heathrow.